) has recently announced the pricing of senior unsecured notes
aggregating $1 billion, which are due to mature in 2020 through a
private offering. The interest rate, conversion rate and other
terms have not yet been decided. Additionally, the company
authorized the repurchase of additional shares worth $1 billion
of the company's common stock.
Priceline stated that the transaction proceeds will be used to
fund the expansion of the company's $1 billion stock repurchase
program. Management said that some of the proceeds would be used
to repurchase shares up to $450 million in privately negotiated
transactions. The net proceeds would also be used to buy back
stock in the open market. The remaining amount would be used for
general corporate purposes.
Priceline.com is one of the leading online travel companies in
the world. In the recently concluded first quarter, the company
generated $183.1 million of cash from operations and used $76.4
million to repurchase its common stock.
At quarter-end, Priceline had $936.0 million in long-term debt
and $526.2 million in short term debt, totaling $1.46 billion.
Currently, the company's debt-to-total capitalization ratio is
only 26.8%, which will increase after the issuance of these
We believe that Priceline has a strong balance sheet, which
will help the company to capitalize on investment opportunities
and make strategic acquisitions, further improving its growth
prospects. We believe the senior notes offering will bring down
its cost of capital, thus strengthening the company's balance
sheet and supporting its future growth. Additionally, the
continued share buybacks will increase investor enthusiasm for
Currently, Priceline has a Zacks Rank #3 (Hold). Other stocks
that have been performing well and are worth a look include
), all carrying a Zacks Rank #1 (Strong Buy).
IAC/INTERACTIV (IACI): Free Stock Analysis
OVERSTOCK.COM (OSTK): Free Stock Analysis
PRICELINE.COM (PCLN): Free Stock Analysis
PETMED EXPRESS (PETS): Free Stock Analysis
To read this article on Zacks.com click here.